A security agreement is a contract between a borrower and creditor involved in a secured debt transaction such as a secured note. The agreement gives the creditor a security interest in the collateral pledged to secure the debt. As such, if the borrower defaults on the debt, then the collateral can be sold to recover the remaining debt payments.

A security agreement will include a detailed outline of the specific collateral, debt re-payment schedule, and late payment fees. This is included in a website purchase agreement involving seller financing and a promissory note secured by collateral.